Easy, they hand me some dvd's and vhs tapes, and I make as many copies as they want, then I deliver them the next day and hand them a bill for it once a week along with my bill for the deliveries I did.
Blank dvd's cost me 38 cents each, takes about 10-20 minutes to make a copy the way I have things set up at the moment.
The VHS tapes take awhile, real time playback to digitize it, then awhile to re-encode into mpeg2 video/mpeg2 audio, then time to author and burn them. Ive got that part automated though. Once the tape is digitized I just run one command and awhile later the dvd ejects when its done. Most of the time I have to make like 2-5 copies of the dvd after that.
I charge $2.50 each to make dvd copies, and $7.50 per hour each for VHS to DVD.